1 Ganesh Iyer Intel Inside Week 4 EWMBA 206

2 Ganesh Iyer Measuring Brand Equity for Intel l Conjoint Analysis can help measure the value of Branding Strategic Value of Branding l Goes directly to the customer, by passing the product that it is a part of- l Importantly, branding Intel changes the power balance in the channel, taking power away from the manufacturer. »Integrated marketing mix = branding affects the channel relationship. Intel IBM End User

3 Ganesh Iyer Measuring Brand Equity for Intel Direct Value of Branding from End-User l Creates extra value for the product containing it. l Provides insurance for your demand in case technological superiority is not maintained. l In technology markets “network effects” can be a source of brand equity.

4 Ganesh Iyer Sources of Brand Equity l Brand investments are like the posting of a credible bond to consumers. »Consumers use branding as a signal of quality or reliability. »Acts as a symbol that enables a consumers to identify products that have been satisfactory in the past and to reject products that have failed. »The consumer’s dependence on brands motivates the firm to invest in its product and attempt to maintain or improve quality over time. l Successful branding therefore creates a “virtuous cycle” l In technology markets branding can create value through enhanced “network effects”. Consumers use brand as a credible signal of quality Firm makes investment in Branding and quality Firms with greater brand equity will lose more if they cheat on quality

5 Ganesh Iyer Why has the Intel Inside campaign alienated the OEMs? l How is the Intel Inside effort different from campaigns for NutraSweet (G. D. Searle)? HOMEWORK.

6 Ganesh Iyer Integration of marketing mix: Branding and Advertising What else is Intel Inside saying? l Any other processor is unacceptable. l Communication Strategy: »Instead of talking about “what you can do” or “why you are better”? »Just say “everyone else is unacceptable.” »Owning the category l What are other examples of this type of a communication strategy?

7 Ganesh Iyer Other examples

8 Ganesh Iyer Learning l In technology and BtB ingredient markets branding creates value by changing the power balance in the channel. l Creates added value for end-users. l Offers insurance in case technological superiority is not maintained. l Conjoint analysis helps to measure the sum of these values. l Successful branding creates a “virtuous cycle” »Brands are credibility bonds that companies post.